Does it pay to be different? An analysis of the relationship between corporate social and financial performance

This study explores the relationship between corporate social performance (CSP) and corporate financial performance (CFP) within the context of a specific component of CSP: corporate charitable giving. A model of the determinants of the extent of corporate charitable giving is estimated and used as...

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Bibliographic Details
Published in:Strategic management journal 2008-12, Vol.29 (12), p.1325-1343
Main Authors: Brammer, Stephen, Millington, Andrew
Format: Article
Language:English
Subjects:
Business management
Business structures
Charitable giving
Consumer goods industries
Corporate governance
Corporate social responsibility
Correlation analysis
Donations
Financial investments
Financial management
Financial performance
firm performance
Investment management companies
Investment risk
Management science
Philanthropy
Portfolio management
Social responsibility
Studies
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Summary:This study explores the relationship between corporate social performance (CSP) and corporate financial performance (CFP) within the context of a specific component of CSP: corporate charitable giving. A model of the determinants of the extent of corporate charitable giving is estimated and used as the basis of a classification that groups firms according to the difference between their actual and their predicted intensity of gift giving. The financial performance attributes of the classification are explored. We found that firms with both unusually high and low CSP have higher financial performance than other firms, with unusually poor social performers doing best in the short run and unusually good social performers doing best over longer time horizons.
ISSN:0143-2095
1097-0266
DOI:10.1002/smj.714